A Power Outage in Venezuela

Venezuela experienced its second major blackout in three months on Dec. 2 as the government struggles to address public concerns about economic stability. With municipal elections set for Dec. 8, the government has opted to blame the political opposition for the blackout. Venezuela's electric grid has been deteriorating for decades and will be a major point of vulnerability for the government going forward.

At just past 8:00 in the evening, local time, the entire western and northern parts of Venezuela lost power for an hour and a half. Nineteen of 23 states were affected by the blackout, which was reportedly caused by a failure at the Arenosa substation in central Venezuela. This facility is part of the country's most important transmission network bringing electricity from the massive Guri hydroelectric dam to population centers.

As soon as the lights went out, accusations began to fly. The government has accused the opposition of economic sabotage, and the opposition is accusing the government of failing to maintain critical infrastructure. Media reports also indicate that there have been scattered public protests throughout the affected regions.

For all the government's insistence that this was the result of sabotage, there is likely a more mundane explanation: Venezuela's electricity infrastructure is poorly maintained, underfunded and extremely vulnerable to disruptions. After a massive failure in September, the government claimed to have reinforced security on transmission lines and added generation capacity. Despite these efforts, this week's blackout points to inherent weaknesses to the system that are a result of underinvestment and poor management.

Electricity demand is Venezuela's primary problem. Venezuela has one of the highest per-capita usage rates in Latin America. High and growing electricity use is difficult to keep up with from a production standpoint. This is exacerbated by the fact that many consumers connect to the grid illegally by tapping electricity lines with improvised wiring systems. This puts an enormous financial burden on the state owned electricity company and makes it difficult to maintain or upgrade the system. A report issued in 1999 by Venezuelan electrical industry experts warned at the time that the country would need to add 1,000 megawatts every year to keep up with demand. While some gains have been made, progress has been slow, and the government has only been able to add a fraction of the necessary generating capacity needed to keep up with demand.

These troubles mirror ongoing turmoil throughout the rest of the economy, which is faltering amidst a shortage of foreign exchange. The government response has been to blame the opposition for conducting an economic war. To address inflation, Maduro has led a campaign of price controls, starting with household electronics, and is set to target automobiles and commercial real estate next. While some consumers will benefit in the form of lower prices, these measures are likely to push goods to the black market and deepen scarcity issues.

With municipal elections approaching, Maduro will continue to focus on blaming the opposition for the country's economic challenges. However, as this week's power outage shows, there are foundational weaknesses facing the government, and scapegoating is unlikely to remain a viable strategy for very long.